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A Retiring Professor Starts Over

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By R. Thomas Berner

My wife and I spent our university's fall break in Santa Fe, N.M., selecting a building lot and ironing out details for our retirement home. My wife retired as an academic adviser last June and I will retire this June, after 28 years of teaching journalism at Penn State's main campus. When we pack up our house and head West, I'll be 59 and she'll be all of 58.

For faculty members just starting out, retirement is undoubtedly the furthest thing from their minds. In the early years of an academic career, the focus is on tenure, and after that, on subsequent promotions. My second wife and I would like to suggest that new faculty members should start thinking about retirement even before they sign their first contract. And they have many things to think about, starting with which retirement plan to choose.

We both selected Pennsylvania's State Employee Retirement System -- a fortuitous choice, as it turns out. I joined that plan on the advice of a colleague, who said prophetically: "It's the same plan as the legislators have; do you think they won't take care of themselves?"

Even before I got tenure, my first wife and I bought a nice house in a good neighborhood. Jimmy Carter was president and mortgage rates were around 15 percent. The elderly couple we bought the house from agreed to finance it at a lower rate, and I borrowed the down payment from relatives.

My older colleagues also made me aware of various annuities in which I could invest and reduce my income-tax obligation upfront. And as the investment grew, I also had a pool of money from which I could borrow at a very low interest rate, something I had to do twice unexpectedly.

When interest rates went down, we formally bought our house. We added a master bathroom and a spacious deck and then enclosed the front porch.

Then we got divorced.

When we sold the house, though, we received nearly twice what we had paid for it after having lived in it for 10 years. I was about 48 and starting over when I met my current wife, who was an academic adviser in my college. She and her ex-husband, and the bank, owned the condominium she lived in.

To cut old ties, we sold her condo and bought a house, but the only upgrades we made were new carpeting and annual termite treatment. When we sold the house four years later, the profit, such as it was, barely covered the upgrading. But the sale gave us the leverage to buy a bigger house, and because the owners wanted a hassle-free move to a retirement home, we also got it for a good price.

Just as my first wife and I had done, my wife and I immediately began upgrading the home -- borrowing the money from our credit union to finance the changes. In seven years, we installed hardwood floors, enclosed a screened-in porch, and recarpeted the four bedrooms, among other changes. A house is not just a home, it's also an investment, and we made all of our changes with an eye on resale.

Last September, we sold the house at a 53-percent markup over the original purchase price. That, coupled with savings backed up by both of our annuities and our pension contributions, gave us the financial backing we needed to build a house in Santa Fe.

But I may have made this sound all too easy. I need to go back a few years and emphasize some things that we did that put us in the position we're in today.

My advice at the beginning of this essay notwithstanding, we didn't start planning our retirement before we signed our contracts with Penn State. But we realized we had picked a good retirement plan because, sure enough, the legislators did increase pensions a year ago. Because I will be retiring nine months short of my 60th birthday, I will not get my full pension, but the recent increase cushions the difference.

We didn't decide to retire on the spur of the moment. When I was 55, my wife and I set 60 as our goal for retiring. Fortunately, I had a dean who was willing to negotiate a reasonable retirement package, built mostly around my giving up sabbaticals and teaching additional courses. (I'm legally constrained from revealing details.)

Tell your dean that you're interested in a retirement package; don't let the dean try to divine what's on your mind. Remember that it's usually in the university's interest to get you out the door sooner rather than later.

I also seized other opportunities to make additional money, both through my consulting business and at Penn State. My wife and I paid off our car loan, put extra money into our mortgage payments, and stuffed as much as we could into our savings account.

We also decided that after living in State College since the late 1960s (we both had arrived as students), it was time to move, and we settled on Santa Fe. (We have four daughters and four grandchildren scattered about the country, so we don't have the family ties to our community that other retirees might.)

We used to say "life's too short," but I believe that the obverse of that existential quip is more accurate. My wife and I both come from long-lived families and have reasonably good health. Barring something unforeseen, we expect to live into our mid-90s.

We have the potential, thus, to have yet another life beyond just waiting to die. Fortunately, we both have marketable skills that some academics don't, and we expect to continue earning income for at least another decade. We have our annuities as a backup, and we did buy long-term care insurance.

When I see retired professors, some of them quite frail, walking around the campus doing nothing new or challenging, I realize that seeking a productive life elsewhere after retirement is a better choice. Among my retired colleagues, the happier ones seem to be those who left town and never looked back.

I encounter too many campus retirees who invariably say, "We didn't do things that way when I was on the faculty." I don't want to live the rest of my life wasting my energy second-guessing the generations that follow me. I agree with whoever said old people have a duty to get out of the way and let the young take over and prosper. Not only are my wife and I doing that, we're glad to do it.